Payday Loans: Not Even Necessary

I have no problem helping a client address deliverability issues, even if their industry or politics encompass something I don't personally approve of. My friend Mickey Chandler and I (who have very different political affiliations) have worked capably together to help address deliverability and compliance issues for various political senders on both sides of the US political spectrum.

But payday lending holds a special place in my (dark) heart.

This industry has a history of being overrun with overzealous, ethically-challenged lead-gen marketers and loan brokers who buy and sell email addresses like crazy, leading to scenarios where one single web loan approval request submission can result in many followup emails and calls from many different entities for months afterward. I honestly think it is a permission-challenged industry overall-- and that is why I loudly and regularly recommend that any legitimate mail platform or email service provider avoid working with these kind of senders. Set aside the politics of it; set aside the ethical concerns (if you can), or not. The fact is, if you send to the same people four times a day, while fifty other senders are sending to the same people four times a day, then all you do is break the inbox. Nobody succeeds-- their default mailing practices cause deliverability issues you can't fix.

The industry's spam problems, and my own personal experience dealing with those spam problems, got me to wonder about their lending practices. After doing a bit of reading, I learned that these loans basically have an interest rate ten or twenty times higher than most credit cards (and most credit card rates are pretty high to begin with). I also learned that thirteen different states have outlawed payday loans, and federal law caps the interest rate on these loans to active military service members at 36%, which means the payday loan industry won't service military members.

Defenders of this industry say that their very high interest loans provide a necessary service to an underserved portion of the community. People would go without food, wouldn't be able to get their car fixed, or might even die, if they can't get that tiny loan with the effective 400% APR.

But is that even true? No, writes Ashlee Kieler in a special report in the Consumerist, a blog published by Consumers Union. The world does not end! Believe it or not, research strongly suggests that capping interest rates on loans has a positive impact on consumers. And options still exist; those borrowers in need are not cut off from the modest financial assistance that a payday loan claims to provide. The only things they lose out on are the crazy high interest rate, and an inbox full of spam that invariably follows an online payday loan approval request.

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